How we chose these investments

Vanguard offers a wide range of mutual funds and ETFs, so why did we select these investments for your consideration in the cost comparison? They were chosen because of their similarity to your current investment. That includes investment objectives, styles, and categories.

Stock and bond fundsWe select Vanguard stock and bond funds primarily based on their matching Morningstar category. When there are multiple Vanguard funds in a specific category, we narrow the results by using characteristics including a fund’s median market capitalization (for equity funds), effective duration (for fixed income funds), and then additional criteria if necessary. In some cases, there may not be a match.

Note: More than 60 Vanguard funds offer Admiral Shares, which have lower costs than Investor Shares. We use a fund’s Admiral Shares class when available.

Exchange-traded fundsFor ETFs, we apply the Morningstar category as the first selection criteria. If necessary, we narrow the results using an ETF’s primary index and median market cap (for equity ETFs) and effective duration (for fixed income ETFs).

ExclusionsWe exclude the following funds from the calculations: all Vanguard funds that are closed to new investors; all Vanguard Tax-Managed Funds; all Vanguard Managed Payout Funds; all mutual funds with a $100,000 minimum investment; and FTSE Social Index Fund, High Dividend Yield Index Fund, and Dividend Appreciation Index Fund.

Considering costs and other factorsCosts are important when choosing investments because you can control how much you spend on costs. Costs aren’t the only thing to focus on, however. It’s also smart to keep in mind your personal goals, the length of time you plan to invest, and your tolerance for risk.

Paying too much for your mutual funds or ETFs?

The less you pay in investment expenses, the more of your returns you get to keep—an advantage that can compound over time. That's why it can be smart to choose a fund or an exchange-traded fund (ETF) with a lower expense ratio. See how much you could save by comparing your fund's costs with the costs of a similar Vanguard fund or ETF.

Before investing, always consider whether a fund or an ETF is appropriate for your financial goals and understand its investment objectives, strategies, and risks.

Compare your fund's or ETF's costs to the costs of a similar Vanguard fund or ETF

Enter a non-Vanguard fund or ETF

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Have questions?

"In every single time period and data point tested, low-cost funds beat high-cost funds."

—Morningstar study*

Why do costs matter?When you invest at cost, you can keep more of your returns—and over time that could translate into a performance edge. A study by Morningstar, the independent research firm, found that focusing on expense ratios helps you make better investment decisions.

You must buy and sell Vanguard ETF Shares through a broker like Vanguard Brokerage Services (we offer them commission-free), or through another broker (you may incur commissions). Vanguard ETFs are not redeemable directly with the issuing fund other than in creation unit aggregations. Like stocks, ETFs are subject to market volatility. When buying or selling an ETF, you'll pay or receive the current market price, which may be more or less than net asset value.

* The Morningstar study covered expense ratios from 2005 through 2008 and then tracked the funds' progress through March 2010. Total returns were measured as of the end of March 2010 for mutual funds that survived the study period. The study found that in every asset class over every time period, funds in the cheapest quintile produced higher total returns than those in the most expensive quintile.